Lumb Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places. What are the equivalent units for materials for the month in the first processing department?
A)595
B)7,995
C)8,100
D)7,400

Question

Lumb Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below:  Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places. What are the equivalent units for materials for the month in the first processing department?
A)595 
B)7,995 
C)8,100 
D)7,400

Quizplus · Accepted Answer

The equivalent units for materials are calculated as follows:
Equivalent Units = Units completed and transferred out + (Equivalent units in ending work in process inventory * Percentage completion)
Equivalent units for materials = 31,000 + (1,800 x 40%) = 31,000 + 720 = 31,720
Therefore, the closest answer choice is B) 7,995.

Lumb Corporation Uses the Weighted-Average Method in Its Process Costing